THE ETHIOPIAN SUGAR

INDUSTRY
Profile and current status
 1. History of Sugar Production in Ethiopia

• Ethiopia is among the best suited countries for Sugar Cane

production.
• Where average yield of cane is more than 150 tons/ha.
•The country is endowed with vast amounts of land suitable
for sugar cane production with suitable weather and ample
water sources.
•Sugar cane production is started in Ethiopia in 1954 at
Wonji. After that another sister factory for Wonji is
established at Shoa in 1962. Wonji/Shoa sugar factory until
last fiscal year has a gross crushing capacity of 3,000 tons of
cane per day and it was producing 76,000 tons of sugar
annually. Currently its crushing capacity has been expanded
to 6,250 tons of cane per day.
 Cont…
•Metahara sugar factory, which is the second oldest factory in the country,
started production on November 1969.
•The factory has undergone various expansions since its establishment and
has now reached a production capacity of 130,000 tons of sugar and 12.5
million liters of ethanol.
•The youngest sugar factory is Finchaa, started operations in 1998/99 and
currently has a production capacity of 110,000 tons of sugar and 8 million
liters of ethanol. In Addition to this the new factory which has a crushing
capacity of 6,600 has started its operation at the end of last year.
Currently the country has a production capacity of about 493,321 tons of
sugar and 41.2 million liters of ethanol annually. Production capacity is
expected to boost after the projects at the existing factories and new projects
are finalized. The last 10 years sugar sector performance is depicted below.
1. The history of Sugar Production and its current
capacity in Ethiopia.
Year of Current Capacity
Historic Capacity Establish
ment
Ethanol
S.N Factory Cane Production in
Cane Ethanol
crushing production Crushin Metric cube
TCD g In TCD
1 WONJI 1,400 - 1954 6,250
2 SHOA 1,700 - 1962 ->10,000

3 METEHARA 5,000 12,500 M3 1969 5,300 12,500

4 FINCHA 4,400 8,000 M3 1998/99 12,000 20,000
5 TENDAHO - - - 13,000

Total 12,500 1998/99

20,500
Operating Factories
2. Strategic Plan of the Sugar Sector
Socio-economic importance of the sugar
sector
• Value addition in Gross Domestic
Product
• Rectifying balance of payment
• employment generation
• regional development
• Technological transfer
• And sectorial integration
Strategic Plan of the Sugar Sector … cont.
The main themes of the Growth and
Transformation Plan (GTP) with regard to sugar
production are :-
• finalizing projects started before the GTP
period,
• operating Arjo Dedessa factory at full
capacity,
• operating projects started during GTP period
at minimum of 70% capacity
The GTP period targets in terms of Sugar,
Ethanol and Electricity generation are
depicted below.
Ethiopian Sugar Factory Location
• By 2014/15 budget year seven new sugar factories will start production. And
the rest project will start by the subsequent years.
Cogeneration

• From those fifteen existing sugar factories and sugar

development project , Ethiopia can generate a total of 953
MW electricity.
 Performance Related to the Strategic Plan

•During the last three years there were great

achievements in all project components.
•Moreover, the expansion projects;
Wonji/Shoa and Fincha Sugar Factories has
already started production.
 Operating Factories Production Capacity

OPERATING FACTORIES PROJECTS

Description 
Tendaho Tendaho Arjo
Wonji Methara Fincha Kuraz 1-5 Beles 1-3 Welkit Kessem
phase 1 phase 2 dedesa

Factory
crushing 12,000/
6,250 5,300 12,000 13,000 13,000 12,000 24,000 10,000 8,000
capacity in 24,000
TCD
Net Irrigable
Area
(Plantation)
15,802 10,200 20,569 25,000 25,000 175,000 75,000 44,000 20,000 20,000
in Ha

Note:
•kuraz -12,000 TCD three factories each and other two factories 24,000TCD each.
•Beles - 12,000 TCD each three factories.
•A total of 430,571 ha are available for both factories and projects. From those
46,571 Ha for currently operating factories and the rest 380,000ha for the projects.
Tendaho : On the verge of completion
Performance of New Projects

Cane Planting

To date executed
Factory Unit as of June 30/2014
 
Tendaho ha 18,479
Kesem ha 7,125
Kuraz ha 5,452
Belese ha 10,009
Wolkait ha 261
Arjo Dedesa ha 1,666
Total ha 42,992
Cane Planting

Factory Unit 2014 /2015 plan 

Tendaho ha 10,521
Kesem ha 2,066
Kuraz ha 10,048
Belese ha 4,000
Wolkait ha 1500
Arjo Dedesa ha 2300
Total ha 30,435
New Projects in Progress
 Arjo Dedessa New Factory

Kuraz New Factory

gar Factory Construction
To date Project
Remark
Factory Progress (as of Dec. 30/ Completion
 
2013 ) in %  Date 
Tendaho
89.45 April, 2014  
1ST phase
Tendaho
30 February, 2015  
2nd phase
November,
Kessem 70
2014
Arjo
constructed March, 2015  
Dedesa
Beles 1 53 December, 2014  
Beles 2 41 February, 2015  
Collecting letter of
Beles 3    
ugar Factory Construction … cont.

To date Project
Remark
Factory Progress (as of Dec. Completion
 
30/ 2013 ) in %  Date 

Kuraz 1 57 August, 2014  

Kuraz 2 -  Mid 2016 Contract signed
Kuraz 3 - Mid 2016 Contract signed
Kuraz 4    
Kuraz 5    
>20% of the civil Contract on the
Welkite Mid 2016
works verge of signing
Demand and Supply Gap of Sugar
Sugar demand of Ethiopia
• annual growth rate is 15%
• Till last year sugar has been
imported
Sugar supply
• In 2013/14 Ethiopia will be self
sufficient in sugar
• starting 2014/15 we shall start sugar
export
 Companies engaged in ongoing Sugar projects
    Companies engaged
Agricultural
Factory/ Project/
Developmen irrigation Factory Construction
Project Operating factory
t

Wonji Operating factory Local Co. Local Co. Completed

Finchaa Operating factory Local Co. Local Co. Completed
Tendaho Project Local Co. Local Co. Indian Companies
COMPLANT, (Chinese
Kesem Project Local Co. Local Co.
company)
Local Company
Belese 1 Project Local Co. Local Co.
(METEC)
Local Company
Belese 2 Project Local Co. Local Co.
(METEC)

Belese 3 Project Local Co. Local Co.  

 Companies engaged in ongoing Sugar projects
    Companies engaged
Project/
Factory/ Agricultural
Operating irrigation Factory Construction
Project Development
factory
Local Company
Kuraz 1 Project Local Co Local Co
(METEC)
COMPLANT
Kuraz 2 Project Local Co Local Co
(Chinese company)
COMPLANT
Kuraz 3 Project Local Co Local Co
(Chinese company)
Not yet
Kuraz 4 Project Not yet signed Not yet signed
signed
Not yet
Kuraz 5 Project Not yet signed Not yet signed
signed
Wolkait Project Local Co Local Co Not yet signed
Arjo-
Project Local Co Local Co Completed
Dedessa
Investment Incentives in the Sugar Sector
•To encourage private investment, the Ethiopian Government
has developed a package of incentives under Regulations
No.84/2003.
1. Investment Guarantee and Protection:- In Ethiopia both the
Constitution and the investment Code protect private property.
2. Customs Duty Exemption:-
•A 100 percent exemption from the payment of import customs
duty and other taxes levied on imports of investment goods.
•Exemptions from customs duties or other taxes levied on
imports are granted for raw materials and packing materials
necessary for the production of export goods.
•All goods and services destined for export are exempted from
any export and other taxes levied on exports.
3. Income Tax Exemption
• Income tax exemption for new investment from 2-8
years depending up on the area of investment, the
volume of export and the location in which the
investment is undertaken.
• Income tax exemption for expansion investment for a
period of two years if it exports at least 50% of its
products and increases, in value, its production by 25%.

4. Loss Carry forward

• Carry forward losses for half of the income tax
exemption period, after the expiry of such period
Remittance of Funds
•Foreign investors are entitled to make the following
remittances out of Ethiopia in convertible foreign currency at
the prevailing rate of exchange on the date of remittance:
•Profits and dividends accruing from investment;
•Principal and interest payment on external loans;
•Payments related to a technology transfer agreement;
•Proceeds from the sale or liquidation of an enterprise;
•Proceeds from the transfer of shares or of partial ownership
of an enterprise to a domestic investor;
•Expatriate employees may remit, in convertible foreign
currency, unspent salaries and other payments accruing from
their employment in hard currency.
Note: - The above information concerning investment incentives is
obtained from Ethiopian Investment Authority in 2008. There might
be some changes since then
Area of Cooperation
•All sugar factories are intended to have ethanol
production plant. And, any interested foreign company
can engaged in ethanol production as a Joint venture.
•Joint venture in both agriculture and factory projects of
Beles 3, Borena and Ethiopia Somali each have 12,000
TCD and 25,000 Ha capacity .
• Ethiopia will be net Sugar exporter by
2014/15. So, we need partners in the area of
international trade and marketing to be
competitive in the world market.
• The Sugar Corporation is seeking partners to
get assistance in technical & management
training and agricultural research.